On April 28, 2025, the Green Development Institute (GDI), Net Zero Asia Limited (NZA), and the International and Comparative Law Research Center (ICLRC) released a joint research report on Developing a Transition Finance Roadmap for BRICS, with inputs from climate finance experts from China, Brazil, Russia, South Africa, and India. The report analyzes the current progress, challenges and opportunities for member states in decarbonizing their economies, identifies barriers to developing transition finance in BRICS, and develops recommendations on scaling up the transition finance market. Thirteen actions are proposed to operationalize the transition finance framework in BRICS, which could lay the foundation for an ecosystem of transition finance and help guide countries in mobilizing public and private investments to support their decarbonization efforts in the Global South.
Following is the executive summary of this report. A link to the full report can be found at the end of this summary.
Executive Summary
The sustainable finance landscape can be broadly divided into "pure green finance" and "transition finance." Transition finance is highly important, particularly to BRICS countries, in addressing the financing gap for their climate agenda and achieving their sustainable development goals, largely because many BRICS economies are dominated by hard-to-abate sectors.
For BRICS, it is essential to build upon global and regional frameworks to create a robust, region-specific transition finance roadmap that aligns with its diverse economic and industrial landscapes. In 2022, the G20 Sustainable Finance Working Group (SFWG) published the G20 Transition Finance Framework outlining the high-level principles across five pillars to guide global transition finance. Building on this, in 2024, the G20 further developed principles for credible transition plans for financial institutions and corporations.
For BRICS, the BRICS Transition Finance Framework, introduced in the 2024 BRICS Business Council annual report 2023/24, provides a foundational approach to mobilizing capital for energy and other low-carbon transition activities within the bloc, tailored to BRICS unique economic contexts. While this framework establishes shared principles including energy transition and the concept of transition finance, further development is needed to create a detailed roadmap for operationalizing these principles, in alignment with the proposals from the G20, BRICS Business Council, and other global initiatives that support the implementation of transition finance.
This roadmap needs to consider the climate goals under the Paris Agreement as well as sectoral priorities, technical feasibility of transition pathways, financial market development levels, and the institutional and capacity constraints facing BRICS members.
Our analysis shows that BRICS are facing several key challenges in developing transition finance. These challenges include, among others, the underdevelopment of national transition plans and sectoral pathways, the absence of applicable and interoperable transition taxonomies and benchmarks, the underdevelopment of transition finance instruments, a lack of capacity to develop corporate transition plans, a lack of fiscal and carbon market instruments to incentivize transition finance, and a shortage of third-party service providers for transition finance. Some of these challenges are general to all markets, while others are BRICS-specific.
Based on our analysis of the status quo, challenges to, and emerging good practices on transition finance, this report proposes a roadmap, with 13 specific actions, for developing transition finance in the BRICS economies. The key actions proposed are:
1. Formulate comprehensive national transition plans that outline sector-specific emission reduction targets, financing strategies, and policy measures to provide a clear direction for financial institutions and businesses in supporting the low-carbon transition.
2. Establish detailed technical transition pathways for industries with high emissions to clarify the necessary technological shifts, investment needs, and policy support required for their decarbonization.
3. Develop a guideline for BRICS transition finance taxonomy as the baseline/reference for national taxonomies in member countries, to facilitate harmonization and to gain international market recognition.
4. Develop a BRICS corporate transition plan template to enable low-cost adoption by companies in member countries and to enhance transparency.
5. Facilitate the adoption of a disclosure framework based on the International Sustainability Standards Board (ISSB) standards to improve the consistency and comparability of corporate climate-related financial disclosures.
6. Expand the range and standardization of transition finance instruments to encourage more private sector funding to participate in supporting decarbonization.
7. Establish a BRICS Just Transition Fund for Transition Finance, which could be hosted by the New Development Bank (NDB), to help crowd in private sector financing.
8. Establish a Transition Guarantee Facility under the NDB to provide financial guarantees for loans supporting the adoption of green technologies in BRICS countries, thereby reducing investor risk and accelerating decarbonization.
9. Develop a strategy to enhance the openness and credibility of the voluntary carbon markets in BRICS through the adoption of the Core Carbon Principles developed by the Integrity Council for Voluntary Carbon Markets (ICVCM).
10. Develop options to promote the use of local currencies for green and transition finance, with the aim of reducing financing costs.
11. Develop an international green technology platform, hosted by an organization such as the United Nations Conference on Trade and Development (UNCTAD) with BRICS support, to disseminate technology information, facilitate adoption, and connect stakeholders for project financing.
12. Foster an ecosystem for transition finance services by standardizing certification frameworks, including key stakeholders such as verification service providers and incubators.
13. Enhance capacity building efforts among BRICS by formalizing a cooperation mechanism with the Capacity-building Alliance of Sustainable Investment (CASI) to promote training and technical assistance.
Unlocking these opportunities through closer collaboration could position BRICS as a leader in financing climate-aligned transitions, while helping to improve access to finance, reduce costs, develop interoperable market standards, facilitate cross-border investment, and avoid duplication of capacity-building efforts.
To access the full report, please click here.
